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2017 (12) TMI 1847 - HC - VAT and Sales TaxLevy of VAT - lease charges paid by the Railway department to the petitioner - It is the contention of the counsel for the petitioner that since the agreement was executed in West Bengal and that no transaction whatsoever transpired within the jurisdiction of Chhattisgarh, the State of Chhattisgarh could not have levied tax - HELD THAT:- VAT Act is an enactment by the State Legislature under entry 54 of list 2 schedule 7 of the Constitution of India. Undisputedly, in the instant case the petitioner company is receiving the lease charges from the Railway department against the wagons purchased by the petitioner and which have been handed over to the Railway department. Admittedly, the agreement was made prior to the present South East Central Railway came into existence and the agreement was with the erstwhile South East Railway. It is also not in dispute that the wagons were manufactured by two different companies one locating in the State of West Bengal and other locating in the State of Rajasthan and the wagons have also been delivered by the manufacturers at the place of manufacture i.e. in West Bengal and Rajasthan. Since the time of transfer of the wagons to the Railway department by the manufacturers, the Railway department has been paying charges to the petitioner company. In the instant case an agreement was entered into by the petitioner with the erstwhile and undivided South Eastern Railway and the contract was executed at Calcutta. The supplies of wagons were made at Calcutta, West Bengal and Bharatpur, Rajasthan. The further undisputed fact is that by virtue of the said sale or purchase, the benefits from the said is being reaped by the petitioner company in the State of Chhattisgarh and for the services so provided, the Railway department is paying lease charges to the petitioner again in the State of Chhattisgarh - there is a transfer of rights to use goods which in the instant case is in the form of wagons used for the transportation of materials belonging to the petitioner. The transfer of right to use the goods and that for the wagons so purchased at the behest of the petitioner’s establishment are availing the benefits within the territories of the State of Chhattisgarh as has been discussed in the preceding paragraphs, this Court has no hesitation in reaching to the conclusion that the imposition of tax on the lease charges by the Assessing officer and the rejection of the revision by the Revisional authority vide its order dated 30.05.2015 is just and proper and does not warrant interference. Petition dismissed.
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